Vince Cable moots women-only shortlists ahead of international women’s day
By Michelle Perry | CFO UK | Published 15:35, 05 March 14
Cable has been a vociferous opponent of the push to hire more women onto company boards setting up the government’s steering group Women on Boards in 2011. The group led by Lord Davies, set a target of 25 percent for the number of female directors on FTSE 100 boards.
The latest figures for the FTSE100 show that the figure now stands at 20.4 percent, up from 12.5 percent in February 2011. Only another 60 new female board appointments need to be made to reach the target for the FTSE 100, according to latest government estimates.
Since 2011 progress has been swift and promising – despite several boards in the FTSE 250 lagging, and Glencore and Antofagasto still have no women.
Both business and government have been keen to show a united front to European leaders that progress can be achieved through gentle persuasion, and of course an overhanging threat to legislate if chairman don’t act.
One of the driving forces behind the initiative is because the UK is on the whole against compulsory quotas and the European Commission is pushing through plans, although currently stalled, for a compulsory 40 percent quota for female representation on boards.
According to the EC, its most recent figures show that the share of women on boards across the EU has been on the rise for the past three years and has now reached 16.6 percent, up from 15.8 percent in October 2012.
Despite all this progress – the UK now also has two female chairmen and four chief executives in the FTSE 100 – if we look below executive level it seems women have taken a step backwards in some regards.
Mind the gap
Recent data shows that the gender pay gap in the European Union is on average 16 percent, says Jacqueline Minor, head of representation at the European Commission in the UK (the first women to hold the post).
In the UK that gap is greater sitting at 20 percent, says Minor, who was speaking at an event hosted by Business for New Europe, a pro-Europe, pro-reform group and Mentore, an organisation dedicated to increasing boardroom diversity.
Shockingly this gap holds true at executive levels too. In a new book ‘The Chief Financial Officer’ by Jason Karaian published by the Economist, he found that men earned 16 percent more than women in CFO roles at listed US companies.
“This disparity is not because of a difference in responsibilities,” Karaian writes.
In finance, the ratio of women to men studying accountancy is roughly 50:50, with the figure often leaning slightly in favour of women. And yet as these young accountants further their careers the percentage of women attaining executive roles drops off a cliff. There are a number of socio-economic reasons for this, including women choosing to take career breaks to have children and often not returning to the workforce for a whole plethora of reasons.
One of the reasons this is worrying is because headhunters recruiting women for executive roles have persistently argued that they struggle to find suitable female candidates because the pool of women is smaller.
It is therefore all the more disquieting to see new research published on Wednesday by PwC that shows over half of the so-called millennial generation of workers – those born between 1980 and 1995 – do not feel that work opportunities are really equal for all.
PwC’s report Next generation diversity – Developing tomorrow’s female leaders, based on a survey of over 40,000 global workers, reveals that nearly a third (29 percent) of female millennials think that employers are too biased towards male employees when it comes to promotion.
What’s perhaps shocking is that the perception of gender bias in companies is still a concern for this generation of female workers, who are set to make up 25 percent of the global workforce by 2020.
A whopping 82 percent of female millennials said an employer’s policy on diversity, equality and workforce inclusion is important when deciding whether to work for a company.
Jon Andrews, head of HR consulting at PwC, said: “If we want to develop a strong pipeline of future women leaders it is vital we understand what motivates this generation and therefore what organisations need to do to attract, develop and retain millennial women.”
Are women stronger within Europe?
Europe has a strong track record on improving women’s rights, and yet the UK’s voting record in European elections (the next one is due in May 2014) is dire. Britons’ opinion of UK membership of the European Union is ambivalent. So much so that prime minister David Cameron has promised a referendum on the UK’s membership of the EU by 2017 if his party wins a majority at the next elections.
Amber Rudd, Conservative MP and government whip, told the audience at the Business for New Europe event on Tuesday: “The European Union helps us achieve a strong economy, but it has no role on equal rights on pay, or boards.
“I don’t believe it has a role to play in quotas.”
Baroness Goudie, a labour peer, who was also speaking at the event ‘What Europe can do for women’, says that although she is against quotas for women on boards, she believes we should negotiate from within the EU.
“I don’t believe in quotas, I’ve never believed in quotas including in all-women shortlists. I believe that we must have at least fifty-fifty on all shortlists.”
Baroness Goudie is also a founding member of the 30% Club, an organisation working with chairman to increase female representation on boards to 30 percent, 5 percent higher than the government’s target.
She adds: “We have now about 76 chairmen of the FTSE 100 companies who have signed up to us.”
Last December Sir Win Bischoff, founding chairman of the 30% Club and chairman of Lloyds Bank, announced an extension of the goal to encompass 30 percent female representation on executive committees by 2017.
The bank recently took a voluntary step further saying it would achieve a goal of 40 percent female representation at all levels of management by 2020.
Emma Avignon, CEO of Mentore, which sponsored the BNE event on Tuesday, says: “What I find fascinating is that we have these wonderful senior women who are invisible, not within their organisations but outside. No one knows about them and they don’t have a platform to get out there and move into the world and up the ladder.”
For all the progress that women have achieved in business, there still remains a long way to go to achieve gender diversity in British boardrooms and the workforce as a whole. And although the majority of business women CFOWorld has spoken to – including some of the country’s top female CFOs – are against compulsory quotas or any kind of tokenism, it’s hard to ignore the fact that legislation can and often does help achieve lasting change. For now, maybe, just the threat of it is enough.